Tether, the company behind the USDT stablecoin, may now be the 11th-largest Bitcoin holder in the world, following the stablecoin issuer’s recent release of its Q2 2023 proof-of-contribution report.
According to the report, Tether recorded an increase in its excess reserves, increasing by $850 million, bringing the company’s total excess reserves to approximately $3.3 billion.
These excess reserves are profits that the company does not distribute as dividends to shareholders. Instead, Tether holds 100% of it as reserves and uses it to back all USDT in circulation and stabilize the token.
Tether holds $1.6 billion worth of BTC in a single wallet?
Last quarter, Tether said it held over $1.5 billion worth of BTC (roughly 53,495 BTC) in reserves. In its latest quarterly report, this figure increased by over $176 million, bringing the company’s Bitcoin holdings to about $1.676 billion (roughly 55,022 BTC).
Tom Wang, research analyst at 21.co, said: found Analysts predicted last quarter that Tether may be storing all of its bitcoins in one wallet, making it the 12th largest BTC holder at the time. Fast forward to Q2 2023, and the analysts appear to have confirmed their original speculation.
In Q1, the BTC holdings in Tether’s “probable” wallet address matched the BTC amount published in the company’s authentication report. The address’s BTC balance also increased in Q2, matching the amount provided in Tether’s Q2 report.
Analysts noted that there is only one Bitcoin address that matches Tether’s BTC reserve figures, and that this address likely belongs to the stablecoin issuer, who is currently the 11th largest Bitcoin holder in the world.
Wang reached out to Tether and its CTO Paolo Ardoino for confirmation of his findings, but has not received any official confirmation from the stablecoin issuer.
Tether’s BTC holdings remain as planned
The sheer amount of BTC held by Tether is not surprising, given that the company has always made clear its intention to invest in Bitcoin. In May, the stablecoin issuer Announced The company plans to invest 15% of its future profits in Bitcoin.
Tether CTO Paolo Ardoino, a Bitcoin enthusiast, said the cryptocurrency’s durability is why his company continues to invest in the asset.
Ardoino said:
The decision to invest in Bitcoin, the world’s first and largest cryptocurrency, is driven by its strength and potential as an investment asset. Bitcoin has continually proven its durability and has emerged as a long-term store of value with significant growth potential. Its limited supply, decentralization, and widespread adoption make it a favored choice for both institutional and retail investors.
However, there were concerns that increased investment in volatile assets like Bitcoin could put Tether and USDT at risk.
At the time of writing, USDT is the largest stablecoin in the cryptocurrency market. Market capitalization Approximately $83.81 billion.
USDT market cap at $83.79 billion on the daily timeframe | Source: USDT chart from TradingView
Featured image by Wit Olszewski/Alamy; charts from TradingView